I wondered about the O/S shares as well, and came to the same conclusion as you did. TEIM reported 20m shares 9 weeks ago, and then today they "announce" they now have 20% of the O/S of NAMX. who only has 60m shares O/S - ????
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So today I called the 800# but the fellow there seemed too preoccupied with other things to discuss anything of substance with me about the operations, he did apologize and suggested I call him again, only after ascertaining if I was interested in buying some NAMX right away or not (g)
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Before I hung up he reaffirmed the 60m O/S figure, and when I challenged that number (as per the above) he waffled and suggested I call back.
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So I then spoke with the Chairman of the Board of both Companies (I think that's the title he has on both boards) and he stated TEIM has 38m O/S TEIM has 20m shares of NAMX and NAMX has 100m shares O/S.
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Doing the math one TEIM = 0.526 share of NAMX i.e. if NAMX = $0.125 then TEIM should be about $0.065
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We also spoke about the reserves NAMX might have and they feel 12.5B is a fair conservative number to use, for NOW. I don't have a problem using that number for NOW either, understanding that the three wells have only just gone through testing.
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I was told they expect the wells to produce for 20 years, but for my purposes I never use more than 10 years, with a sloping off after a while, no later than say 6.5 years.
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Work that out with say Gas @ $2.75MCF and we see $34m in reserves, and with 100m shares O/S that's maybe $0.34 per share.
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Divide that by 10, 12 or 20 years (your pick) and we have about $.03 a share (straight line) gross per year. Of course this could vary widely if the more wells come on-line or if wells slow down sooner than I suggested.
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I don't know where or how NAMX is funding their drilling program, other than the comment said to me "we pay for it out of petty cash".
One really needs to know what's on the Company's balance sheet and how they will afford the cash flows required to drill the impressive program announced previously. I was not able to assertion the amount of working capital or other pertinent balance sheet items. NAMX is a non-reporting Company, and as such I had no reason to expect the Company to provide such information to me, and they didn't
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Colin |
